Photoshop Elements: Can Organizer show thumbnails for .avchd/.m2ts/.mts files?

I'm new to photoshop elements organizer, so hopefully I'm wrong. However, I can't find a way to display thumbnails for .avchd/.m2ts/.mts files captured from my Sony video camera. This makes it very difficult to organize video files quickly.

I apologize, the title of my question is misleading because I say "photoshop". However, I DO have Premier elements installed. Premier and Photoshop both use the same organizer. My issue is specifically with the organizer and not the editors. The Photoshop/Premier elements organizer does not show thumbnails for the following formats: .avchd/.m2ts/.mts . These formats were captured from a Sony HDR-SR11.

So back to the question...is there anyway to provide thumbnails in the Photoshop/Premier elments orgainzer for these files?

I followed the steps you listed above. Unfortunately it didn't work for mts, m2ts or avchd. I included a screenshot of the icon i see after selecting "update thumbnail". As you will see it is still just a genereic icon. When I select "update thumbnail i do not get an error. Just a quick status bar...so quick that i can't read what it is doing.

Oh and worth noting, I did NOT get the warning dialog for UAC that you mention in step 3.

Elements 10 organiser has a problem with AVCHD files as saved by SOny and Panasonic cameras. Simple put if you try to import picture files from the top folder that has AVCHD files in a sub-folder Elements stops working. This is severely troublesome when you have a lot of files to deal with

I have just reinstalled Photoshop Elements 10 and on trying to import a folder from my Sony Alpha 55 with both still and AVCHD files it stopped working again.
For the record I have both PE 10 and Photoshop Premier Elements 10 installed.
MY photograph files are stored in folders with the dates of download as the names and as direct copies of the cameras card contents.
Lightroom has no problem with the data.

I have had the same or similar problem. I normally copy my cameras' card directly to a hard disc and duplicate it for backup. Then I try to catalogue the varius still and movie images using Elements Organiser 10 which crashes when it sees the dierectories with movies, meaning I have to separate the relevant files and directories before I can work further. The first appeared on my Sony A55, now Sony A77 and also my Panasonic TZ20.
I find the directory system/organisation on these rather less than helpful, possibly a requirement of the AVCHD format specification. If I navigate directly to the movie files I can play them and even edit them with Serif Movieplus X5 so for me the Adobe software is a waste of space. Originally I did find it helpfull (version 6) but now it is practically useless.